From this past weekend's Market Radar till now when Greece has officially defaulted on there payment to the IMF the market has move in a highly expected manner, not because on the surface this seem like a very bad situation, but technically we perfectly setup for a pullback. I consistently map out the market day by day based on very strict "High probability Pattern" and a core set of indicators combined to give us the best opportunity of a tradeable market move. Nothing in the charts have proven this move has not been expected or in some cases not welcomed. The coinciding event of the Greek default in my opinion is a random coincidence but enough to exaggerate the move lower making the market feed on the added focus of this event.
I have always said patterns and technical levels will be skewed and distorted and in most cases fail do to this outside event. This event has done damage to a lot of stocks and options but the one thing it hasn't done is break from the norm of the current daily SPX (S&P500)
Below is 60 Minute chart of the SPX and as you can see it is a thing of beauty when looked at from a chartist perspective.We left off setting up in a bearish flag on the 60 min chart and I would actually like to see this break down early in the morning. Best levels to watch are 2050-2040. I will be able to narrow it down more tomorrow as the patterns set up.
*** Note..As news will be breaking tomorrow morning and overnight things might move before the official open here in the U.S So the downward break is something I will be prepared for but we could move right up from here if news comes across in a positive light. Which ever and how it happens the overall call is for a reversal higher tomorrow.. either out of the gate or a break down and reversal.
Below is the Daily Chart and you can see the Daily Stochastic Oscillator will be setting up July 1st and 2nd this has pretty much been a major signal for the markets (Remind me to talk about something I am just seeing on the chart)
"July’s first trading day is the fourth best performing first trading day of all twelve months with DJIA gaining a cumulative 852.55 points since 1998. Over the past 21 years, DJIA’s first trading day of July has produced gains 81.0% of the time with an average gain of 0.49%. S&P 500 has advanced 85.7% of the time (average gain 0.45%). NASDAQ has been slightly weaker at 76.2% (0.25% average gain). No other day of the year exhibits this amount of across-the-board strength which makes a solid case for declaring July 1 the most bullish day of the year over the past 21 years. "
and one last thing Focus will be on the Referendum Vote this Sunday if no deal is reached before that. I think there is a good chance they will come to some sort of agreement before the vote but if not the "Polls" will play a part in market action as a "NO" vote will be taken as a sign that Greece want to leave the EU and a YES would probably but not necessarily mean a change in the current government.
So the news will still play a major role in the short term trade. Caution is needed.
